Question: What’s the most misunderstood, underutilized, and even ignored concept in online marketing?
Answer: Data-driven analysis.
Most marketers tend to spend all of their brainpower and energy on generating killer strategies and ideas, designing brilliant marketing automation, and writing hooky ads. All of that can be extremely powerful and effective, but if you don’t analyze before you create, you likely end up wasting your money.
Worse, you may misunderstand your customer’s buying journey and funnel them to the wrong product or website page, wasting a warm lead.
In some ways, it’s the oldest problem in marketing. Claude Hopkins, the father of modern advertising, railed against ‘creative’ ads with no analysis behind them a century ago.
And yet the problem persists in the modern online age even though analytic tools are more powerful now than anything Uncle Claude ever dreamed of!
Our agency takes a different path than most — we begin with data analysis and then move on to creating a marketing strategy. Doing so has, in fact, saved one of our clients from going out of business.
What Is Data-Driven Analysis?
When a company or marketing project is data-driven, it simply means that strategic plans and decisions are based on the actual data that exists for that company or that marketing initiative. It means looking at data before you create and implement a strategy.
What it’s not is following the same playbook that every other business uses and assuming that it will work just as well for you. It’s also not implementing a new strategy and then only looking at the data afterward.
What does data-driven analysis look like for a business? Well, it varies a bit based on each situation but here’s one way to attack it:
- Analyze user data, Google Analytics, and advertising data to uncover the service or product’s actual “aha moment” (instead of its assumed aha moment)
- Uncover opportunities by analyzing competitor data
- Utilize surveys to gain deeper insights since data often creates more questions than it answers
After the final step, you’ll start to have enough information to craft a well-informed, powerful marketing strategy that utilizes your marketing budget effectively.
Data-Driven Analysis In The Real World
Let’s look at an example of how our agency has used data-driven analysis to fuel a client’s growth.
An ag-tech company that builds cloud-based drip irrigation software hired us to increase its user base, gain user data, and increase customer retention.
We have a growth hack that we often use with startups where we acquire real-time user data from Facebook and also grab competitor data. Then we model ads after the competitor’s but beat them to the punch with a more compelling product, pitch, placement, and price.
We’ve had great success with this hack, but with this client, we felt like we really needed more data before implementing a marketing plan. We kicked off our partnership by analyzing their data and making relationships between KPI-based data points they had never analyzed.
We used the following sequence:
- We reviewed their Google Analytics data and current/past user data to establish their baseline KPI metrics. Then we compared our KPIs to the metrics they were using.
- We lined up the KPIs for each segment of their product suite, then analyzed the lifetime value of each segment against its specific cost per acquisition.
- We loaded all the data into Microsoft’s Power BI platform to visualize the trends between these previously separate data sets.
We were looking for that real “aha moment’’ rather than relying on our own or the client’s presumed aha moment.
Results That Changed Their Business
During our data analysis, we noticed a correlation between their highest-valued organic traffic visiting their most underperforming product segment.
This opened their eyes because this product was primarily viewed as a value-add to the main product offering, not as an inroad to their other products.
The data also suggested that the client was spending the majority of their time promoting the segment that appeared to make the most revenue but, to their surprise, had the highest cost per acquisition when factoring in the year-long sales cycle. It also had the highest churn rate!
Our data analysis confirmed the founder’s suspicion that something was off, but that they hadn’t been able to identify themselves yet.
Finding this new information led to a huge change in how the client ran their business. They pivoted their focus to the value-add product that was drawing in so much organic traffic. Their goal was to build initial interest and loyalty with it, then focus on up-selling their satisfied customers into higher tiers of their service.
The results have been staggering over the past year:
All of this happened before we ever wrote one creative ad!
Without first digging into the data, the client may never have made this momentous shift in their business.
Data Dives For the Win
By the way, it turns out that had we started our relationship with this particular client using the popular marketing tactic we described earlier in the article, they might have gone out of business!
Though our hack almost always works, this client’s burn rate was outpacing their sales cycle and they were completely unaware of it.
This is where businesses waste a ton of time and money: instead of doing deep dives to understand their customers and their data, they implement tactics and growth hacks that worked for similar companies and get limited results, at best.
At worst? They implement growth tactics that their current business model just can’t support and risk running themselves into the ground.
Implementing Data Analysis In YOUR Business
It’s hard to resist the temptation to get right to work on ads or other marketing plans, but slowing down to aggregate and analyze your data ensures that you’re putting your energy (and money) in the right place.
Most companies won’t discover something quite as dramatic as our client when they dive into their data, but you’ll nearly always discover something powerful and impactful.
Pro tip: Look at every step of your sales cycle, from activation to acquisition and referrals to monetization. You never know where you’ll find your “aha moment.”
If you don’t have the time or resources to dig into the data yourself, let us help! Just get in touch with our team and we can help you understand your data and then turn that into a powerful, effective marketing strategy.